RFP-18: Strategic Application of $ARB Allocation from Radiant DAO Treasury

Abstract

This proposal details a strategic allocation plan for utilizing the 3,348,026 $ARB tokens granted to the Radiant DAO treasury.

Motivation

$ARB Allocation

As Radiant prepares to expand to other chains, we are proactively undergoing an important audit of our v2 protocol by OpenZeppelin. This audit represents Radiant's third formal review and underscores our commitment to security and reliability. Simultaneously, we are conducting miscellaneous gas and protocol optimizations that are expected to continue for at least another month.

RFP-16's approval enabled the DAO to use these 3,348,026 $ARB tokens allocated by the Arbitrum Foundation, optimally positioning Radiant to solidify liquidity conditions for the protocol.

In this context, it has been noted by our community that Radiant finds itself in a unique position to leverage the DAO’s $ARB allocation. These tokens could be utilized as incentives to stimulate growth, promote engagement, and attract new users. Importantly, the implementation of this strategy would not necessitate any additional inflation of $RDNT tokens.

Starfleet

In accordance with RFP-11, the Radiant DAO approved the establishment of a leaderboard mechanism, known as Starfleet, which aims to incentivize users who contribute long-term value to the protocol.

Starfleet was initially designed to allocate 10% of exit penalty fees to provide treasury incentives for the program. However, the “early-exit loophole” (subsequently fixed last week via RFP-17) allowed many people to bypass these fees, effectively starving the Starfleet initiative of the necessary funds it would require to operate in any meaningful capacity.

Proposed Allocation

In light of the above, RFP-18 proposes to utilize a significant portion of the $ARB token allocation as an airdrop to all new lockers within a specified period. This proposal aligns with the ethos of Starfleet’s “seasons” mechanics, and would enable the DAO to continue with the Starfleet initiative.

The proposed allocation is outlined as follows:

1. Starfleet Season 1 - Up to 40% of $ARB tokens (1,339,210 $ARB) will be distributed through an airdrop to all new 6-month and 1-year dLP lockers. These locks must be initiated between two points: the first snapshot, which is scheduled to be taken shortly after this proposal is approved (should it pass), and a second randomized snapshot, which will be taken between 30-60 days after the first snapshot. To prevent potential manipulation, the precise timing for the snapshots will be disclosed only after the conclusion of the specified period.

   • If RFP-18 passes, the specific airdrop formula weighting and mechanics will be discussed in a follow-up proposal. (For example: if a $2M threshold in new locked dLP is met within the snapshot window, 100% of the airdrop allocation will be released.)

   • dLP lockers on both Arbitrum and BNB Chain will be eligible for the airdrop (note that BNB users will need to claim the airdrop on Arbitrum).

2. Long-term Incentives - 30% of $ARB tokens will be distributed to all Arbitrum dLP lockers over the course of the next year, following the usual multiplier rates based on locking length.

3. Strategic Reserve - The remaining 30% ARB will be reserved for future use by the DAO.

Radiant DAO's motivation to allocate 40% of the $ARB tokens to new 6-month and 1-year dLP lockers is a strategic move aimed at encouraging fresh engagement with the Radiant protocol, while also consolidating liquidity for the year ahead. This approach, an alternative to dual emissions, is designed to attract new users.

Furthermore, the distribution of 30% of tokens via the MultiFeeDistributor (MFD) to current dLP lockers offers a compelling incentive for these key community members to re-lock their tokens, thereby promoting their ongoing involvement in the Radiant ecosystem.

Reserving 30% of the $ARB tokens for future use ensures that the Radiant DAO retains the flexibility to adapt and respond to future needs and opportunities. This balanced approach underscores the DAO’s commitment to immediate growth objectives and long-term thinking.

By adopting RFP-18, the Radiant DAO is not just aiming for an increase in protocol usage and user engagement, but also setting the foundation for a dynamic and prosperous community. This DAO is poised to continue thriving even as we await the completion of the OpenZeppelin audit and anticipate the promising expansions it will enable.

Key Terms

• $ARB: The governance token of the Arbitrum Foundation.
• dLP: Dynamic Liquidity Providers within the Radiant ecosystem.
• Exit penalty: A linear protocol fee incurred (in $RDNT) for early-exit vests which have not reached 90-day maturation.
• Snapshot window: This refers to a predetermined time frame, defined by block height, during which specific on-chain activities can be measured. Please note, this term is not to be confused with "Snapshot.org," the on-chain governance system.

Specifications

Upon ratification, the following steps will be enacted:

1. 40% of $ARB tokens in the RDNT DAO Treasury (equivalent to 1,339,210 tokens) to be allocated to Starfleet Season 1.

   • The snapshot window will commence within 72 hours of RFP-18 approval.
   • The snapshot window will conclude within 30 to 60 days from opening.
   • In order to prevent manipulation, the exact duration of the snapshot window will remain undisclosed until it ends.
   • Specific details concerning the Starfleet Season 1 airdrop, such as the distribution ratio between 6-month and 1-year locks, and airdrop caps, will be addressed in a subsequent proposal.

2. 30% of $ARB (amounting to 1,004,408 tokens) to be distributed to all Arbitrum dLP lockers over the next 52 weeks. This will be executed via the protocol’s MultiFeeDistributor contract, the same mechanism used to distribute all other token incentives.

3. 30% of $ARB tokens to be reserved for future use.

Steps to Implement

• For the airdrop: two random snapshots will be taken within the next 60 days for Starfleet Season 1. The airdrop distribution will be based on consensus to be determined in a follow-up proposal.

• For ARB distributed linearly over the next year to Arbitrum dLP lockers: A technical scoping process and a testing environment will be established to ensure the DAO's capability to distribute 19,315.53 $ARB tokens weekly. This amount represents 1/52 of 30% of the total 3,348,026 $ARB allocation to the MultiFeeDistributor. The MultiFeeDistributor will then disburse the $ARB tokens in the same manner as it currently distributes protocol fees.

Overall Cost/Impact

While the development costs associated with constructing, auditing, and implementing dual-emissions are still to be fully determined, initial estimates suggest a "low/medium" level of effort. This estimation is based on the possibility to leverage tried-and-tested code, which should streamline the process.

Timeline

Should RFP-18 be approved, the process of technical scoping and testing would commence immediately. This stage involves verifying that the DAO can effectively transfer $ARB tokens into the MFD contract, which would then emit the tokens along with all other protocol fees over the 7-day distribution period. This verification process is anticipated to take a maximum of 1-2 weeks. Upon successful verification, $ARB tokens from the DAO are expected to start linearly streaming to all dLP lockers without delay.

The process of capturing snapshots for the Starfleet Season 1 airdrop is projected to take between 35-65 days to complete, factoring in setup and snapshot window duration. There will be a subsequent governance proposal to follow RFP-18 concerning the precise formula used to determine the weighted airdrop to new dLP lockers.

Voting

• In Favor: Supportive of, agreeing to use 70% of ARB tokens to incentivize dLP lockers
• Against: Against implementation of RFP-18
• Abstain: Undecided, but contributing to quorum